ITC Spotlight ‑ July 2023 Edition

• Jurisdiction: United States,Federal
• Law Firm: Hughes Hubbard & Reed LLP
• Subject Matter: Intellectual Property, Patent
• Author: Mr Andrew R. Kopsidas
• Published date: 31 July 2023

Is It Time to Get Real About the Public Interest Factors?

Eighteen years ago this week, eBay, Inc. filed its petition for certiorari with the Supreme Court challenging a Federal Circuit decision that applied its "general rule that courts will issue permanent injunctions against patent infringement absent exceptional circumstances."¹ The Supreme Court opinion that issued almost a year later dramatically changed the way injunctions are handled in patent cases in federal district courts, holding that injunctions in patent cases are to be treated no differently than in other types of cases and are subject to the traditional four-factor test.

Following eBay, Inc. v. MercExchange LLC,² the Federal Circuit in Spansion Inc. v. Int'l Trade Comm'n, held that the remedies in the International Trade Commission ("ITC" or "the Commission")'exclusion orders and cease and desist orders'are different creatures than injunctions in district court and, accordingly, are not subject to the Supreme Court's eBay decision.³ Ironically, the court that was formed to bring uniformity to patent law created a completely separate standard for injunctions in the ITC.

In the wake of the Spansion decision, many commentators predicted a coming wave of non-practicing entity ("NPE") litigation that would swamp the ITC. It has been almost twenty years since eBay, and although many of those doom-and-gloom predictions have proven to have been overblown, the fact remains that well-funded NPEs do regularly appear in the ITC attempting to take advantage of its sledgehammer remedies.

The most commonly-cited reason for why the ITC remains an attractive forum for companies, including certain types of NPEs, is Section 337(d)(1)'s mandate that the Commission "shall direct that the articles concerned, imported by any person violating the provision of this section, be excluded from entry into the United States" if a violation is found. This seemingly-inescapable interpretation was reinforced by the Federal Circuit in Spansion, which relied on this statutory language to find eBay inapplicable to ITC proceedings.⁴

The prevailing sentiment that the Commission will issue exclusion and cease and desist orders automatically upon the finding of a violation is technically incorrect. Section 337 states in four separate places that no remedies should issue unless they are consistent with the public interest.⁵ But even though technically incorrect, this sentiment accurately represents the reality of ITC practice...